Description

Carbon trading is the idea is to develop a mechanism to allow market to drive industrial and commercial processes in the direction of low emissions. Working in that direction, Governments of various countries are trying to come up with, a trading mechanism where companies gain a monetary benefit out of polluting the air less. Kyoto protocol’s goal is exactly that. The idea is to divide the whole world into two, one who can afford making changes to their existing infrastructure and the ones who cannot. As everybody is polluting, be it a developed country or a developing country, the financial aspect has to be kept in mind. All developed countries will have to cut down their emissions by some x percentage or else they pay heavy fines. Now, one way of measuring how much they are polluting the air less, is by clean each tonne reduction of CO2 a unit and a company must own those amounts of units at the end of every period.